Amazon will drop smaller publishers if they insist on the agency model
March 19, 2010 | 2:16 pm
By Paul Biba
Yesterday we published a couple of articles on Amazon/Apple and the larger publishers. Now comes some news about the smaller ones.
According to published sources, Amazon has told smaller publishers that it would not negotiate “agency model” terms with anyone other than the initial five Apple partners. If a publisher outside this list insisted on the agency model then Amazon would drop their entire list, both print and digital.
Welcome to the real world of commerce. Publishers have been protected for so long that I bet this comes as a shock. Not to the rest of the sales world, however. This is, actually, a real opportunity for smaller publishers. The initial 5 have locked themselves into a rigid pricing model and they don’t understand the retail space. By staying away from this model, and by cooperating with a retailer who understands pricing better than anyone, the smaller pubs can try all sorts of marketing schemes to beat the big guys. Don’t forget, the “agency model” guys have now taken over price control and have absolutely no experience as to how to use it. It will be fun to see what happens.
Thanks to Erin Biba for the heads up.